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Australia will “supercharge” the energy grid by underwriting investment in renewable energy generation and storage.
The expanded national Capacity Investment Scheme aims to give the federal government a better chance of hitting stronger renewable energy and emissions reduction targets.
Yesterday’s announcement came one week before the 28th United Nations Climate Change conference opens in Dubai.
As Grattan Institute energy analyst Tony Wood writes, the government had to do something. And he says the scheme is “a good idea for two reasons”. First, it provides more certainty for investors. Second, it hands responsibility for reliability of the grid to the states, which have different needs and preferences when it comes to replacing dirty coal or fossil gas.
The government is not telling us how much it’s willing to pay to underwrite renewable energy projects. That would defeat the purpose of the scheme’s auctions, whereby clean energy companies will bid for government backing. But we’re assured it’s all budgeted for.
As Wood says, the government won’t be handing out blank cheques. Successful projects will be offered contracts in which a revenue floor and ceiling are agreed with the Commonwealth.
At worst, taxpayers will be propping up a few renewable energy projects to keep them financially viable until coal exits the grid. At best, the scheme will be a good little earner, providing an extra revenue stream. And we’ll be much further down the road to our goal of net zero emissions by 2050.
Meanwhile, last night the Productivity Commission released an interim report from its broad inquiry into early childhood education and care.
A key recommendation is every Australian child aged under five years gets access to three days a week of “high-quality” early learning and care.
This is a bold move. As Peter Hurley and Melissa Tham write, “this would be the first time there is an explicit policy aim in Australia for an entitlement like this”.
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